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Last Updated on 25/04/2024 by owen_2023

The scheme, launched by Minister Ryan, Minister McGrath and Minister Richmond, means homeowners can borrow from €5,000 to €75,000 at significantly lower interest rates to make their homes warmer and cheaper to run.

The Government-backed €500 million scheme will support homeowners to invest in energy efficiency

Minister for the Environment, Climate and Communications, Eamon Ryan TD; Minister for Finance, Michael McGrath TD; and Minister of State at the Department of Finance with special responsibility for financial services, credit unions and insurance, Neale Richmond TD, have today launched a new low-cost Home Energy Upgrade Loan Scheme. The €500 million Scheme is the first of its kind for both Ireland and the European Investment Bank (EIB) Group and will play a crucial role in helping homeowners to invest in energy efficiency, making their homes warmer, healthier and cheaper to run.

This Government of Ireland Scheme is delivered by the Strategic Banking Corporation of Ireland (SBCI) on behalf of the Department of the Environment, Climate and Communications, and supported by the Sustainable Energy Authority of Ireland (SEAI) and the EIB Group.

PTSB is the first financial institution to offer loans to homeowners under the Scheme, with rates from 3.55%. AIB, Bank of Ireland, Avant Money and seven credit unions from the Irish League of Credit Unions (Clonmel, Connect, First South, Listowel, Naomh Breandan, North Midlands and Progressive) are finalising the approval process and legal requirements to provide the Scheme and are expected to commence offering loans in the coming weeks.

With more lenders and increased competition in the market, it is expected that rates will be extremely competitive, offering consumers more choice and value. Rates will be significantly lower than those currently on the market because of the combination of an EIB Group loan guarantee and a Government-funded interest rate subsidy. The loans will help lower the financial barriers encountered by homeowners, making home energy upgrades more accessible and affordable.

 

“This innovative Scheme shows how the Government, financial institutions and the retrofit sector are working together to deliver climate action that works for people and planet. We have designed the loans with the needs of homeowners in mind. Access will be simple and speedy with an emphasis on reducing the workload for homeowners accessing both loans and grants. We also anticipate that with greater competition on the market, loan rates will also become more competitive, giving people more choice and value.” Minister Ryan. 

 

At the moment, other personal loan rates can be up to 14% interest. As an additional bonus, households could also qualify for a lower cost green mortgage in the future after they use their low-cost loan to improve their BER (Building Energy Rating) rating up to the required level.

The loans can be used by homeowners who want to undertake a deep retrofit involving several energy upgrades at the same time or to carry out one or two upgrades that will significantly improve the energy performance of the home. In order to avail of the low-cost loans, the upgrade projects musts be supported by an SEAI grant and be projected to achieve a minimum 20% improvement in the energy performance (BER) of the building.

Homeowners will apply for the loans through the participating finance providers. There will be no requirement for the loan to be secured against the property being upgraded (as is the case with a mortgage). Once approved, the loans can be drawn before works begin. This gives certainty to homeowners that they have the funds for the planned energy upgrades as well as any up-front costs or milestone payments. This is often identified by homeowners as a key barrier to upgrading their homes.

Those most at risk of energy poverty can continue to avail of fully-funded energy upgrades under the Warmer Homes Scheme. The availability of low-cost loans will make it easier for those above the eligibility threshold to upgrade their homes.

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